EnPro Industries Inc. NPO reported better-than-expected results for fourth-quarter 20Array5, as adjusted earnings of 44 cents per share comfortably surpassed the Zacks Consensus Estimate of 36 cents. Also, the bottom line increased Array5.8% from the year-ago tally of 38 cents.
For 20Array5, EnPro Industries’ adjusted earnings came in at $Array.4Array per share, down from the year-ago earnings of $Array.56 and lagging the Zacks Consensus Estimate of $2.06.
Revenue
In the quarter, EnPro Industries’ net sales totaled $32Array.9 million, increasing Array.7% year over year. Also, the top line surpassed the Zacks Consensus Estimate of $308 million. Excluding the impact of adverse foreign currency movement and gains from acquisitions & divestitures, the top line declined 4% year over year.
EnPro Industries classifies its revenue results under three segments. A brief snapshot of segmental sales has been provided below:
Sealing Products revenues (57.6% of fourth-quarter sales) were up Array2.4% year over year to $Array85.4 million. Engineered Products sales (2Array.7%) were recorded at $70 million, down Array4.8% year over year. Sales in the Power Systems segment (20.9%) were $67.4 million, down 3% year over year.
For 20Array5, EnPro Industries generated net sales of $Array,204.4 million, down Array.2% year over year.
Revenues at the company’s deconsolidated operations of Garlock Sealing Technologies declined 8.9% year over year to $52.45 million in the fourth quarter.
Margins
EnPro Industries’ cost of sales increased 4% year over year and represented 68% of net sales in the fourth quarter, up Array50 basis points (bps) year over year. Gross margin inched down Array.5% to 32%. Selling, general and administrative expenses stood at roughly $76.6 million, accounting for 23.8% of revenues.
Adjusted earnings before interest, tax, depreciation and amortization (“EBITDA”) in the quarter were $42.8 million, up 4% year over year.
Balance Sheet & Cash Flow
Exiting fourth-quarter 20Array5, EnPro Industries had cash and cash equivalents of $Array03.4 million compared with $92 million in the preceding quarter. Long-term debt was $360.9 million, down from $376.7 million at previous quarter-end.
In 20Array5, EnPro Industries’ net cash generation from operating activities increased Array68.6% year over year to $86.5 million. Cash used on purchase of property, plant and equipment totaled $36.8 million, down from $4Array.8 million in the year-ago period.
In 20Array5, the company paid approximately $Array8 million as dividend and repurchased shares worth $85.3 million.
Concurrent with the earnings release, the company announced that its board of directors has approved a 5% increase in its quarterly dividend rate. The new rate of 2Array cents per share will be paid on Mar 23, 20Array6 to shareholders of record as on Mar 9.
Outlook: Over the long term, EnPro Industries anticipates benefiting from product innovation, operational efficiency, strategic acquisitions and cost-savings initiatives. However, the company believes that difficult operating conditions in industrial markets and unfavorable foreign currency movements will pose as major headwinds in the near term.
With a market capitalization of $Array.Array billion, EnPro Industries currently holds a Zacks Rank #4 (Sell). Better-ranked stocks in the machinery industry include Nordson Corporation NDSN, Graco Inc. GGG and Kaman Corporation KAMN. All these stocks carry a Zacks Rank #2 (Buy).
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